On January 3, Mr. Cooper Group Inc., announced the acquisition of certain non-core assets of IBM for $48 billion. Chief of these assets include the purchase of IBM’s Seterus mortgage servicing platform that was primarily designed to help a client manage a portfolio of distressed loans in times of financial crisis, especially during 2008. Mr. Cooper’s acquisitions include servicing rights underlying $24 billion in government sponsored enterprise mortgages, and another $24 billion sub-servicing contract in mortgages.
Jay Bray, Chairman and CEO of Mr. Cooper Group Inc., says that he is optimistic that this new liaison will begin a new phase in the management of home finances as this transaction looks forward to augment the company’s profitability targets and portfolio growth, along with providing access to Seterus’s 300,000 customers.
On the other hand, Jay Bellissimo, General Manger, Cognitive Process Transformation, IBM Global Business Services, explained that since 2008 the portfolio of distressed loans is much stable now but is no longer a core asset. The time is suitable to divest this business to a mortgage servicing specialist who will advance it even further. The move is also in line with IBM’s revised business strategy that is to move away from the non-core businesses and to accelerate the company’s security, cloud, cognitive computing and mobile businesses, among other strategic focus areas.
Mr. Cooper expects to fund this transaction, targeted to close in the first quarter of 2019, with the financing on the mortgage servicing rights and cash.